Verdict Food Service

Daily Newsletter

07 August 2023

Daily Newsletter

Yum! Brands Q2 net income surges 86% to $418m

Total revenues rose 3% to $1.69bn and worldwide system sales grew by 13%.

Yum Brands has reported a net income of $418m for the second quarter of 2023, a surge of 86% compared to its income of $224m a year ago.

For the quarter that ended 30 June 2023, the company’s total revenues were $1.69bn, an increase of 3% from $1.64bn in the same period a year ago.

Yum Brands said its worldwide system sales during the quarter grew by 13%, with 9% same-store sales growth and 6% unit growth.

KFC, the group’s largest division, contributed 19% to the overall system sales growth while Taco Bell and Pizza Hut contributed 7% each.

For Q2 2023, The KFC division reported an operating profit of $326m, up 11% from $293m a year ago. Its system sales grew 14% to $8.28bn.

The division opened 600 gross new restaurants across 60 countries during the period under review.

Yum Brands’ Taco Bell division reported operating profit of $228m, up 6% from $215m a year ago. It opened 63 gross new restaurants across nine countries during the quarter.

The Pizza Hut division reported a 2% decline in operating profit to $91m from $93m a year ago. Its system sales grew by 4% to $19.24bn from $18.59bn a year earlier.

During the quarter, Pizza Hut opened 357 gross new restaurants across 42 countries.

Overall, the company added 1,025 gross new units during this period.

Yum Brands’ digital sales during the quarter grew by 30% to $7bn.

Yum Brands CEO David Gibbs said: “Our broad-based momentum continued in the second quarter with system sales growth of 13% owing to 9% same-store sales growth and 6% unit growth.

“KFC, our largest division, led the quarter with an astounding 19% system sales growth. An impressive 1,025 gross new units this quarter and nearly 30% digital sales growth contributed to our robust system sales growth.

“With our strong year-to-date results and continued momentum, we expect to deliver full-year 2023 results well above our long-term growth algorithm for system sales and core operating profit growth.”

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.